DAY 8 — Real Estate Math Basics

How do you calculate a percentage?

Part ÷ Whole × 100

If a house sells for $200,000 and commission is 6%, how much is the total commission?

$200,000 × 0.06 = $12,000

What is gross commission?

Total commission before splitting with broker or agents

What is net commission?

Commission after broker/office splits

How do you calculate agent’s split if commission is $12,000 and agent gets 60%?

$12,000 × 0.6 = $7,200

How do you calculate price from commission and rate?

Commission ÷ Rate = Sale Price

6% commission earned = $18,000, what is sale price?

$18,000 ÷ 0.06 = $300,000

How to find down payment amount?

Purchase price × % down

House price $250,000, 20% down, how much down payment?

$250,000 × 0.2 = $50,000

How to calculate loan amount?

Purchase price − down payment

What is the loan amount for $250,000 house with $50,000 down?

$250,000 − $50,000 = $200,000

What is annual interest?

Loan amount × interest rate

Loan $200,000, 5% interest, annual interest?

$200,000 × 0.05 = $10,000

How to calculate monthly interest?

Annual interest ÷ 12

Annual interest $10,000, monthly interest?

$10,000 ÷ 12 = $833.33

What is a closing cost?

Fees, taxes, and expenses paid when ownership transfers

How to calculate price per square foot?

Sale price ÷ square feet

House $300,000, 1,500 sq ft, price per sq ft?

$300,000 ÷ 1,500 = $200

What types of math problems are common on the real estate exam?

Percentages, commission calculations, and prorations

Quick tip for commissions

“Total × rate = commission, commission × split = agent’s share”